Valuation of environmental amenities in urban land price: A case study in theUlaanbaatar city, Mongolia
Graduate School of Life and Environmental Sciences, University of Tsukuba
Master in Environment: Budjav Khishigjargal
Affiliations: Prof. Yoshiro Higano, Prof. Helmut Yabar, and Prof.Takashi Mizunoya
Introduction
Economic and political transition in the 1990s, land policy and land use have dramaticallychanged; the government begins to encourage land ownership and property market in Mongolia.
Constitution of Mongolia was amended in 1992. By the law Mongolian citizen can have a property. In
2002, “Law on allocation of land to Mongolian citizens for ownership” was enacted. By this law,
citizen can own land. Land privatization is going on the ger (Mongolia traditional house) district
which is land for family use. In 1997, the government evaluated land base value. But now thisevaluation value could not meet rapidly growing economic in Mongolia. Based on base value
amount, if person want to rent or lease their owned land to the bank, the price of land is much lower
than market price.
Another big reason for re-evaluating land value is rapid urbanization and improper sprawl
settlements in the urban area. Mongolia is experienced rapid urbanization in last few decades. The
collapse of socialist regime in Mongolia, people is to seek better access to jobs, services, andeducation in the cities. Ulaanbaatar has, by far, absorbed the largest numbers of these migrants andwith little affordable housing available, most of the newcomers ultimately settle in the ger areas. In
1989, 26.8 percent of Mongolia’s population lived in Ulaanbaatar; by 2006 that number had risen to38.1 percent; and by the 2010 census, 45 percent of Mongolia’s population lived in the capital, which
covers 0.3 percent of the country territory (See Fig. 1).
Figure 1.

Out migration

80000
70000
60000
50000
40000
30000
20000
10000
0
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

Population

In migrationYearAccording to JICA research (2009), reasons of rapid growth of population in Ulaanbaatar city are inmigration, zhud (natural hazard), land privatization in the ger districts and cottages (See Table. 1).
Table. 1
Population growth

Population growth rate

rate in Mongolia, %in Ulaanbaatar city, %

1998

1.4

4.2

In migration

1999

1.4

6.4

Zhud

2000

1.4

3.5

Zhud

2001

1.5

3.3-

2002

1.3

4.2

Land privatization

2003

1.2

5.5

Zhud

2004

1.2

3.9-

2005

1.2

4.0-

2006

1.3

3.0-

2007

1.6

3.7

Cottage privatization

YearFactors

Due to rapid population growth, urban spatial growth without proper settlement, downtown
land price have increased tremendously and many environmental problems facing such as lack ofwater, severe air pollution, soil pollution and degradation. It shows us, need to improve and develop
land policy and urban planning system.
By the Master Plan of Ulaanbaatar city development until year 2020, the government
declared top 6 development priorities. In the plan, urban environment and land management issues
have considered through the improving environment, set-up green facilities and developing efficientland management which are waste management improvement, water management and protect
water source and pollution management, air pollution management, and creation of recreationalzone, etc. As well as in the efficient land management priority, government implementing
redeveloping ger districts, improving urban infrastructure and improve legal framework(Ulaanbaatar city, Government urban planning, research and design institute. 2013). During themaster plan implementation, there some difficulties are coming such as land compensation issues
are raising in the ger district. Because government gives compensation to the residents using basevalue amount and it could not meet current market price.
Due to the all this reasons, Ulaanbaatar city’s land valuation is seems very important study
now.

Hedonic approach
The hedonic price method is used to estimate the value of environmental amenities thateffect price of market goods. Value of environmental amenities were better recognized andincorporated into land use planning, negative impacts associated with urbanization could be
minimized (Heather A. Sandera and S. Polasky. 2009). As well as, urban green facilities andenvironment are seen as a factor that contributes to the quality of life for residents andsustainability in land use (F.Waltert, at all. 2011; Erin O. Sills, Jill L. Caviglia-Harris. 2008). Provide
estimated value to planner and policy maker is for better evaluate the impact of land use change
before decision.
In practice, there are number of variables are used for hedonic price method such asneighborhood and location, local environmental, and structure variables. Which variable to apply theresearch is depending on the study purpose, for example, on farmland, distance from market andsoil quality as main determinants of product and land value (Petr Sklenicka et all., 2013).
Ulaanbaatar city, depend on engineering system, infrastructure welfare, and labor market, andtraffic density, is classified to a monocentric city. In this case, location variable is very important (O.
Nyamsuren. 2012). Monocentric model, with land values declining with distance from the center andland use type is segregated by circle and it became high pressure of land use from another land use
type. According to O. Nyamsuren study, 2012, defined 15 evaluation zones in the central 6 district’s
ger area. Compared defined price to the base value is much lower. It explained that the ger district’sland is located close to the center of the city is sold at high price. From this study, priority variable isdistance from center.
Hedonic price approach estimate the variables using a multiple regression model withhousing price. Numbers of studies are used linear, log-linear and log-log models for get the results.
In addition, using hedonic price method, the result of this study will give reliable information
for the newly established land market and recommendations of future implementation activities andpolicies to the urban development in Mongolia.

Study area
Ulaanbaatar city is capital city of Mongolia. Total territory is 470.4 thousand ha(Administration of Land affairs, Construction, Geodesy and Cartography. 2010). The city has 9districts (See Pic. 1).

The study will focus on central 6 districts’s ger areas, which are

Songinokhairkhan, Sukhbaatar, Chingeltei, Bayanzurkh, Bayangol and Khan-Uul districts.

Picture .1

By the government regulation, 2002, Mongolia has 6 main types of land use classifications (See Fig.
2). The main classifications are divided into sub-classification of their function and utilization. Ger
district is belonged to Cities, villages and other settlements land (See Fig. 3). By the annual land
management report of Ulaanbaatar city, showed in 2012, 84734 household’s 4623.69 ha are owned(www.umch.ub.gov.mn).

Figure. 2
Land use type of Ulaanbaatar city
55.6%

9.7%

1.1%

Agricultural lands

16.3% Cities, villages and othersettlements
Transportion and network land

0.8% Forest resources land
Water resource land

16.5%

Protedted landFigure. 3

Cities, villages and other settlements land
22%
48%
5.8%

10.8%

Constructed land, 22,3
thousand ha
Ger district land, 10,5
thousand ha
Common area, 2,7 thousandhaIndustrial area, 5,0 thousandha
Mining area, 5,2 thousand ha

13.4%

Approximately, 60 % of total populations live in Ger district in Ulaanbaatar. Ger district is aland rounded by fence; house or ger is located inside the fence and it does not connect basic public
services which are heating, water and sewage system, paved road.

Data collection
Primary data was collected. I collected the information of the market price of 6 main
districts’ 564 single families residential property sold at the market source from Administration of Landaffairs, Construction, Geodesy and Cartography, in 2012. Data includes land size, location, property right,housing structures, administration unit, etc. I defined a property’s distance from center, distancefrom bus station and school, distance from well, distance from nearest green area or park using
Geographical information system (GIS).

Future work
Do more literature review; choose which regression analysis is appropriate to the study, analysis thedata and with the result, to map land price with zoning using GIS. In addition, give a
recommendation to urban administration office for redevelopment of ger district.

ReferencesAdministration of Land affairs, Construction, Geodesy and Cartography. 2010.

AnnualReport of land Use-2010. Ulaanbaatar.
Erin O. Sills and Jill L. Caviglia-Harris. 2008. Evaluation of the Amazonian Frontier: Land
Values in Rondonia, Brazil. Journal of Land use policy. Pages 55-67.

Fabian Waltert., Thomas Schulz., and Felix Schlapfer. 2011. The Role of Landscape Amenities
in Regional Development: Evidence from Swiss Municipality Data. Journal of Land use policy.
Pages 748-761.

Heather A. Sandera and S. Polasky. 2009. In review. The Value of Views and Open Space:Estimates from a Hedonic Pricing Model for Ramsay County, Minnesota, USA. Journal ofLand Use Policy. Page 837-845.

O. Nyamsuren. 2012. Cadastral Valuation on Urban Land Purpose. Khukh Mongol printing.

Petr Sklenicka., Kristina Molnarova., Katerina C. Pixova., and Miroslav E. Sale. 2013. Factors
Affecting Farmland and Prices in the Czech Republic. Journal of Land use policy. Pages 130136.

JICA., Ministry of Construction and Urban Development. 2009. City Master Plan and UrbanDevelopment Program of Ulaanbaatar City. JICA. Page 8.

Ulaanbaatar City, Government Urban Planning, Research and Design Institute. 2013. The
Ulaanbaatar City Urban Planning Policy and UB city “Master plan” up to 2020. Ulaanbaatar.



www.umch.ub.gov.mn